4 Energy Cooperatives Leading the Way to a Sustainable Future
The following excerpt is from the new book Energy Democracy: Advancing Equity in Clean Energy Solutions, edited by Denise Fairchild and Al Weinrub © Island Press 2017
A number of energy cooperatives are taking the lead in defining the new kind of energy cooperative described in the previous section of this chapter. Here we describe the energy cooperatives, Co-op Power, Cooperative Energy Futures, Energy Solidarity Co-op, and Ecopower: what they’ve been able to accomplish and the opportunities and challenges before them.
Co-op Power
In the early 2000s in the northeastern United States, a perfect storm was brewing in which the electric utilities were about to be deregulated, activists were organizing to fight climate change, and entrepreneurs were experimenting with various renewable energy technologies. Consumers had few sustainable energy choices. Solar systems installed in the 1970s sat idle, with few solar companies still in operation able to get them back up and running.
People in the Northeast have a tradition of direct democracy in governing their towns through town meetings, and barn raisings are commonly known as events where people come together to build a barn. Though communities are largely segregated by class and race, there are many places where people come together across class and race and get things done. It’s also a part of the United States where climate change is having a noticeable impact, not only on the weather, but on the forests, too.
Co-op Power, launched in 2004, is a multiracial, multiclass cooperative movement. It’s a consumer-owned energy cooperative working for a just and sustainable energy future. It is also a decentralized network of community energy cooperatives in New England and New York dedicated to working together as agents of social, economic, and environmental change in their region:
Boston Metro East CEC (serving the Greater Boston area inside Route 128)
Worcester Community Energy Action CEC (serving Worcester County, Massachusetts)
Hampden County CEC (serving Hampden County, Massachusetts, including Springfield and Holyoke)
Hampshire CEC (serving Hampshire County, Massachusetts, including Northampton and Amherst)
Franklin CEC (serving Franklin County, Massachusetts, including Greenfield)
Co-op Power of Southern Vermont CEC (serving Windham County, including Brattleboro)
New York City CEC (serving Manhattan and the surrounding boroughs)
Co-op Power is owned by 550 families and a handful of schools, universities, cooperatives, and small businesses. The community energy cooperatives in the Co-op Power network all share one cooperative structure to make collaboration easy and reduce administrative costs.
When members join their community energy cooperative, they join both their community energy cooperative and Co-op Power.
Altogether, over the last twelve years, community energy cooperatives have invested in developing 24 new energy enterprises to meet their community’s energy needs, including the needs of people in limited-resource communities and communities of color. They’ve brought in income from membership fees and grants, and they’ve lent money to build various enterprises providing services members have wanted in their communities.
Here is Co-op Power’s recipe for democratizing energy: First, people come together across class and race to make change in their community by using their power as investors, workers, consumers, and citizens ready to take action together. Then, they work together to build community-owned enterprises with local capital and local jobs to serve local energy needs. It’s a proven strategy for making a real difference.
…
Cooperative Energy Futures
In a city that gets an average annual snowfall of 32 inches and temperatures below 50°F for six months of the year, energy costs are a big deal. Cooperative Energy Futures (CEF) is a for-profit, community-owned clean energy cooperative based in South Minneapolis, serving members across Minnesota with their solar projects and energy efficiency services. General Manager Timothy DenHerder-Thomas has been a part of CEF since the beginning and is leading the co-op in its current expansion.
Minneapolis is a thriving midwestern city that routinely makes top-ten lists for best places to live, to find a job, to be healthy, to be a foodie, to live without a car, and to retire. It has a diverse population made up of communities of African Americans, Hmong, Mexicans, Ecuadorians, Indians, Koreans, and German-Scandinavian descendants. It is the second- largest economic center in the Midwest after Chicago and is home to major companies based in health care, commerce, and finance. All the strengths of the metropolitan area make it ripe for opportunity in community building and innovation.
Cooperative Energy Futures, incorporated in early 2009 as a 308B cooperative, started off lean, focusing its energies on providing members with energy efficiency workshops, and bought supplies with funds from a small grant. Another low-capital initiative they undertook was doing member recruitment through solar site assessments and managing the solar sales process for members. Timothy credits these kinds of projects for building long-term grassroots relationships with local leaders and residents in South Minneapolis. Many residents in these communities were also struggling with high energy bills and economic instability.
Cooperative Energy Futures does group contracting for deep insulation retrofits to improve existing building stock. Education is also an opportunity they have tapped into through do-it-yourself trainings for weather stripping, caulking, and home energy systems. More recently, after Minnesota adopted a community solar law, CEF has shifted to developing community shared solar projects; bulk buying insulation and residential solar were reaching only a small portion of their membership.
The cooperative accomplished a lot in its first seven years. Early on, it completed the first couple of rounds of insulation bulk buying for twenty- five insulation installs in the city. They brought quality control and expertise for members as project consultants. Between 2014 and 2015, CEF installed 7.5% of all residential solar that received Made in Minnesota (MiM) state incentives.
CEF has completed a subscription drive for two solar garden projects that, starting in 2017, will provide 110 households with their full power needs for the next twenty-five years. One of their solar garden projects is with a black church in a Minneapolis low-income community of color where project subscribers live in the community. The second solar garden is in the city of Edina, Minnesota, a largely white, middle- and upper-middle-class community. The City of Edina specified it to be for “Edina residents only” as a priority. Multicultural spaces happen on a project basis. Some groups come with that purpose and vision while others are focused on a different set of benefits.
Cooperative Energy Futures operates with universal principles. For example; it does not discriminate by credit score. The CEF solar gardens are accessible in a way that private corporate projects are not. CEF has also partnered with Renewable Energy Partners to do direct job training for residents of northern Minneapolis and require installers to employ people of color as 50% of their labor force, including graduates from the training program.
Reflecting on the challenges that CEF faces, DenHerder-Thomas says, “In the current policy framework, there are a lot of barriers to getting involved. We have a monopoly utility system that constrains our ability to do things outside of the box.” Another challenging area has been financing the projects members want. Community solar finance is complicated and requires significant investment from tax equity investors such as banking institutions. CEF works with investors to create a new norm of investment and is trying to get all people to rethink how to create value without extracting wealth from communities.
CEF has sought to create opportunities through clean energy to empower people and make the economy work for everyone. It has had a strong focus on economic access and is interested in job training and economic development in communities of color. CEF empowers communities to create their own future by working together to build, own, use, and manage basic energy systems that sustain the community.
Energy Solidarity Co-op
The West Coast provides an interesting opportunity for renewable energy cooperatives since many energy policies are decided on a state-by-state basis. Energy Solidarity Cooperative (ESC) is recent start-up in Oakland, California, that designs and builds community-driven, cooperatively owned solar energy projects and political educational programs. They focus on building relationships with such groups as community-based organizations, schools, and places of worship in communities of color and with low-income residents.
Oakland has long been a working-class city in the San Francisco Bay Area. Being the eighth-largest city in California, Oakland serves as a trade center for San Francisco. It saw demographic changes between 2006 and 2016 but is still very diverse, with 65.5% of residents being nonwhite. There are long-standing African American, Hispanic American, Asian American, and Native American communities as well as recent immigrants from China, Vietnam, the Philippines, Southeast Asia, and Central and South America.
The cooperative sees renewable energy as the opportunity to build community power—social, political, infrastructure, economic, and generative. They see this as being part of the just transition toward solidarity economies. The cooperative is comprised of worker-owners, consumer-owners, and community-driven funders—an innovative approach that works to bring the often differing interests of each group under one umbrella.
These stakeholders work to build out more community-owned clean energy systems and energy efficiency measures in underserved communities. They finance energy systems and efficiency measures in a way that keeps money in their community and creates a more secure path to refinancing once they are creditworthy. They work to save revenue for organizations operating at underserved sites while also generating revenue for worker services. Also essential is their focus on growing the clean energy cooperative workforce with ecological and climate justice educational and training programs.
ESC worker-owner Ashoka Finley is focused on building out community-owned rooftop solar and sees his work as being deeper than technology problem solving. "It would be so much easier if we just developed solar projects and didn’t build relationships—we would just pick the best sites and that would be it. But we’re focusing on job growth and education, which can hinder the project’s development in some ways.”
Energy Solidarity Cooperative offers several products and services to meet its mission. Energy efficiency is usually a great first step so ESC conducts residential or institutional preliminary energy audits and minor building retrofits. Buying solar can be a difficult process for homeowners to navigate, so ESC assesses solar potential and site selection for renewable energy systems in neighborhoods. The Co-op also assists with the development of management models, installation partnerships, and innovative financing.
Europe's Energy Co-ops
The roots of the modern renewable energy cooperatives in Europe began in the 1970s in Denmark with the development of wind power. Germany was the next biggest player to get into renewable energy co-ops in the early 1990s, also with wind power. In the United Kingdom, a citizen group’s work on broad community ownership resulted in operating wind turbines in 1995.
Deregulation across Europe has been a great opportunity for social and cooperative entrepreneurs to organize alternative models to monopolies for renewable energy and community ownership of energy resources. Many of the movements were spawned as a way to both disrupt monopolistic utilities and reduce over-reliance on nuclear power. Renewable energy has also seen development in corporate models, as in Spain, where early corporate wind development actually made it harder for cooperatives to become established.
In 2011, REScoop (Renewable Energy Source Cooperative) was founded to help co-ops across the continent share resources and best practices and manage policy. As of April 2016, it included twenty member organizations in eleven European Union states. Citizens can join and form their own REScoops as a way to develop citizen-owned renewable energy projects and are provided with resources to get set up. REScoop holds that energy democracy has a value and views the energy transition as an opportunity to move from fossil fuels and nuclear to renewable energy, from monopoly to citizen ownership, and from people being consumers to being “prosumers” by using the energy that they themselves produce.
One of the most successful energy cooperatives in Europe is Ecopower, a Belgian consumer cooperative founded in 1991 that has built its membership to more than 45,000 and is currently supplying green power from hydro, wind, and solar energy generation. It has also provided support services to help members with insulation of homes, providing building analyses at the front end and checking work quality of contractors at the back end.
Like the U.S. cooperatives discussed earlier, the Ecopower cooperative demonstrates the power of creating relationships with local municipalities, collaborating with other cooperatives, and building membership as powerful stepping stones. These basic practices have helped Ecopower remain competitive with private corporations, although it is facing new challenges with respect to electricity pricing and corporate efforts to co-opt co-op messaging.
Dirk Vansintjan, one of Ecopower’s founding board members, sees collaboration between energy cooperatives becoming more important. He is working across Europe to build a revolving fund that can help coop-eratives across the continent overcome their financing hurdles.